Current contract 8/2016-17 has no penalty clause. New contract 8/2017-18 has penalty clause. Can they make penalty clause affect current contract?

You can sue for breach of contract if they did not pay you what you were owed. The contract cannot be made retroactive to impose a penalty on you that didn't exist at the time your alleged "breach" of the agreement occurred. The law abhors penalties. While parties can include "liquidated damages" clauses in contracts where the damages are a rational estimate of the costs a party will incur because of the other's breach of the agreement, unless there is proof that there is an actual relationship between the "damages" and the actual value of the harm suffered by the non-breaching party, it will be treated as a penalty clause and it will not be enforced. We recently won a case in the court of appeals based on this same kind of contract clause. The new contract cannot be made retroactive to impose a penalty on you that didn't exist at the time your alleged "breach" of the agreement occurred --at least, not without your agreement or the agreement of your collective bargaining agent (if you are unfortunate enough to have one). The law abhors penalties. While parties can include "liquidated damages" clauses in contracts where the damages are a rational estimate of the costs a party will incur because of the other's breach of the agreement, unless there is proof that there is an actual relationship between the "damages" and the actual value of the harm suffered by the non-breaching party, it will be treated as a penalty clause and it will not be enforced. We recently won a case in the court of appeals based on this same kind of contract clause. Michael A. Caldwell 404-9779-3154